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tv   Titans at the Table  Bloomberg  April 12, 2014 9:30pm-10:01pm EDT

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>> hi. >> good morning. >> tonight on "titans at the table" -- this place is gorgeous, it really is. i'll be chatting with businessman turned environmental activist tom steyer. tom steyer was born and raised in the financial capital of the u.s., new york city, but chose to open his company, farallon, in san francisco.
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he founded farallon in 1986 with $8 million, and by the time he stepped down he turned the initial investment into $30 billion, making it the fourth-largest hedge fund in the world. his personal fortune is an estimated $2.6 billion. not satisfied with retiring the golf course, steyer reinvented himself as an activist, funding and starring in a series of public service announcements. >> i'm tom styer. each week, we take a look at the keystone pipeline proposal. >> he believes the pipeline will escalate the production of the controversial canadian oil sands. >> the question here was, is this a chance to change our trajectory in terms of energy? is this a chance to change the way people think about it and the way the policies are shaped around energy? >> we caught up with steyer in the tiny town of mayflower, arkansas, where he was getting a look at the cleanup site from an estimated 5000 barrel oil spill. >> here is some just off the top of the water.
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it's sticky. it's extremely sticky. >> very sticky. >> it smells awful. >> in march 2013, a shallow underground pipeline owned by exxonmobil burst, sending oil running down a mayflower residential street, as can be seen in this video. >> the smell is unbelievable. i mean, look. there's oil. >> the oil flowed down the street through a drainage ditch and emptied into a marshy area. the heavy crude had come from alberta, canada, thousands of miles away. >> what are the booms for? >> they are to soak in the oil. they are supposed to -- >> literally? >> yeah. literally -- >> that's what they're for?
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>> they're supposed to repel water and soak in oil. >> steyer had come to mayflower to gather ammunition for what may be the biggest fight of his life -- trying to stop the keystone pipeline from being built. steyer worries more leaks like this one in mayflower could happen. the proposed keystone pipeline would stretch from the canadian border across the u.s., and connect to existing pipelines that carry oil to refineries on the gulf. steyer says the oil would be sent directly to the international market. >> it is not going to the united states. what the true argument is, it's going to be more oil not from the middle east, that is true, but doesn't mean it's more oil for the united states. it just means there is more oil not from the middle east in the world market. >> we walked with steyer along the quiet street in mayflower that a few months before was covered in oil. exxonmobil is facing $2.6 million fine for the spill and spent $70 million to clean it up.
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the company purchased many of the homes on the block. three houses were so badly damaged, exxon knocked them down. most sat empty. even after an accident like the one in mayflower, defeating keystone could be a long shot for steyer. if you look at the polls, 2/3 of americans do support the keystone pipeline, and that number hasn't budged in the last two years. >> it really hasn't. >> seems like you're in a minority there. >> i think that this is a topic on which people, a, don't really understand what it is and b, it's always presented either we do this or we do nothing. that's absolutely not true. we are not going to run the society without energy. it's just a question of how we think about it. >> but keystone is just part of the problem. steyer says the bigger climate issue is how tar sands oil is recovered from the canadian countryside. 20% of the oil is mixed in sandy soil lying just below the surface and is strip mined and spun in centrifuges to separate the oil from the dirt. the remaining 80% is trapped hundreds of feet below solid
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rock. steam is injected underground to loosen the oil and it is pumped out. the thick tarlike crude must be mixed with chemicals to make it flow through the pipeline. tar sands require 70% more energy to extract than traditional oil. >> this is a gigantic mining operation in the middle of nowhere. they want to take production by 2025, more than double it. >> and your job is to make sure that never comes out of the ground? >> well, look, from my point of view -- i'm not a scientist. the scientists say it would be devastatingly terrible for the seven billion people on the earth if it does. >> when we return, tom steyer looks outside the box for answers. >> i actually believe that the solution for our energy problem is going to be corporate america. ♪
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>> tom steyer claims money didn't motivate him, but he was incredibly good at making it. the investment firm he founded, farallon capital management, has a market value of almost $4 billion, and that has made steyer a very wealthy man. if you didn't really like using money as a benchmark for your success, you still made a lot of it. how did that work? >> for better or worse, i am competitive. >> competitive and diversified. steyer's investment fund, farallon, invests in energy companies. including kinder morgan, a canadian operator that transports oil sands. but steyer promised to divest from his kinder morgan holdings and pledged to donate money to the victims of wildfires. he looks to the oil industry for answers. >> how do you take the incident that happened in mayflower and
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what happened to peoples' lives there, how do you apply that to the work you're doing now against the keystone pipeline? >> let's step back for a second, which is this. i actually believe the solution for our energy problems is going to be corporate america and actually will be private enterprise america. when we get the policy framework right, the people in that sphere will come up with creative, imaginative, innovative solutions that will blow our mind. i mean, if you really look at what's happening in the fossil fuels arena, people are being really creative and innovative. some people hate fracking, but fracking is a new technology that somebody from the united states came up with as a way of engineering around an old problem. that's exactly what i expect american business to do. >> what you're saying is no, not all corporations are evil, not
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all corporations are bad, and in fact it's ok to make money as long as it's towards a similar goal. >> i don't think corporations are evil. what i don't think we should do is rely on corporations for our morality. you know, the truth of the matter is we're a nation of people. and, you know, pretty much -- i hate to say it, but the law of the land is people who run corporations, their responsibility is to take care of the interest of their stockholder. that's a very limited world view in my opinion, and that is not the world view i think is going to get us to the broad answer for society as a whole. so i don't actually feel resentful, i take that as a given. and when someone asks, what's exxon's motivation, my answer is their motivation is their stockholders and their corporate net worth. >> did it make you feel that you needed to do something about what was going on in mayflower? did you feel like you had some responsibility to do something there? >> the truth of the matter is
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what we've been trying to do is get the human story out because that is what other americans can understand and relate to, that experience with something that would have reverberation and impact. >> when we come back, using money to change politics. >> big things are happening. thanks to president obama, america is laying the foundation for the way we power tomorrow. >> you've been a supporter of the president. >> i have. and i am. ♪
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>> billionaire tom steyer has donated $65 million to establish renewable energy centers at yale and stanford, and he has entered into the political arena,
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spending more than $10 million to support various initiatives and candidates opposed to keystone. you've been effective in many of the initiatives that you've targeted, and you've called some of those initiatives you've put money into some of the best investments you've ever made. [laughter] >> they were. >> is that something you're going to continue to do? >> i don't know if that's what i'll do forever, but i think that i definitely continue to do that in 2014. >> in fact, tom is not the only outspoken liberal in the steyer family. his brother jim teaches civil rights courses at stanford and founded commonsense media, a nonprofit organization. the steyer brothers have been compared to another set of politically-minded siblings, the koch brothers, who have spent millions backing tea party candidates and conservative products. >> i don't actually know the koch brothers. >> i didn't think you would. >> i definitely think there has
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to be differences in the sense that those guys are doing something that is consistent with their self-interests. and -- >> when you say "self-interests" what do you mean? >> they are basically pushing stuff that is very good for private enterprise and specifically oil refiners. very consistently, very aggressively, and sometimes very intelligently. i see that as we are on very different trajectory in terms of how we think about it, who we think we're representing, and what we're trying to accomplish. >> but steyer does have an agenda, one that leans to the left. he spoke at the democratic convention in 2012. >> big things are happening. thanks to president obama, america is laying the foundation for the way we power tomorrow. >> he and his wife have given more than $11 million to super pac's he founded, and they hosted a $5000 per person fundraiser with the president at their san francisco home.
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>> you've been a supporter of the president. >> i have. and i am. >> well, initially in his first term, he was quite big on climate change, and he was quite forceful in talking about climate change. are you disappointed? >> i think the president's record through the epa in a regulatory fashion on energy and climate is really good. i think that he really understands this issue. messing this up, you wouldn't see today but in 20 years would be superobvious. and i think they have that perspective. >> tom, do you have any ambitions of running for office? >> i've always said that i would do virtually anything to make our agenda come true. and that is true. but i've also tried to be clear that this is not a -- an intelligent, strategic, well thought out self-interested effort to promote myself. so i would say if there came a
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time i thought that was really important to do, i wouldn't shy away from it because i felt like i was going to get the bejesus kicked out of me. >> you looked like a little bit like a political candidate there at the mayflower diner. though he says he has no plans for higher office, steyer stopped to have lunch with some of the victims of the mayflower oil spill while he was in arkansas, and he listened intently like a good politician. what did you learn in the last few years on your quest to get the pipeline? >> i haven't spent all my time on the pipeline. i spent some time on the pipeline. i think i've gotten a chance to be exposed to more parts of american society than i had been when i was exclusively a professional investor, so i met a bunch of people who -- >> you may not have met those women? >> i would never have met. never have met. and i spent time with them. it isn't like where you just say
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hello, how are you, and have 15 seconds. so, you know, selfishly, i think that's been really fun and that it's been very good for me. >> steyer's anti-keystone campaign hit a bump in the road recently. in late january, the state department released an environmental review stating the keystone pipeline is unlikely to impact oil sands production. if the state report comes out and says look, it's going to happen anyway -- >> is that a good thing? no. there's no way that's a good thing. >> in your view it's not a good thing environmentally, but some would say it would allow the president to say ok, then i will go ahead and approve the keystone pipeline. >> good. >> and then what happens to you? >> personally, i'll still get up in the morning and eat breakfast. i will feel as if a huge mistake has been made. >> i guess my -- if it gets approved, is there still a fight here at all?
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>> i don't know. i've had people talk to me about that. and they've explained to me different ways you can fight. >> you don't want to look towards that point? >> i honestly don't, because i feel like we're committed to the idea of making the case right now. this makes no sense. and it's a chance actually for the president to be a global leader in a way that is incredibly relevant and incredibly historically significant. to me i look at it and go like, someone is giving you on a platter this incredible opportunity, which entirely lines up with your understanding of the world and your understanding of who you want to be in the context of that world. why is that complicated? >> when we return, tom steyer's paradise. running this huge ranch, how is it different than running a hedge fund, a $20 billion hedge fund? ♪
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>> the northern california coast is one of the most picturesque places in the united states, so it is no wonder this is where billionaire tom steyer spends his time. a few miles inland from the pacific is the 1,800 acre ranch steyer and his wife kathryn taylor bought in 2002. only an hour outside of san francisco, it's a world away. buying this ranch, was it your idea or your wife's idea? >> i think you can only blame my wife for that one. originally we bought it because the land had been so misused, you could dump stuff here if you paid them a fee. there had been a d.e.a. raid. they had people -- >> why? >> i think they were growing
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dope. >> oh. running this huge ranch, how is it different than running a hedge fund, a $20 billion hedge fund? >> i'll tell you how it's the same and how it's incredibly different. it's the same in the sense that you think this looks like an asset, but it's actually dramatically changed by the people who run it. and that's exactly like every organization i've been in, which is, having great people, particularly at the top, is unbelievably significant and powerful. and that's where the comparison ends. >> how much have you had to put into this? >> i try never to ask that question. because, you know, we've done -- we've rebuilt every building. kathryn really felt as if raising grass-fed cattle was something that would be a good thing to do and a fun thing to do. >> tomkat ranch has a staff of 15, including scientists who are studying ecologically friendly ways to raise cattle.
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>> you basically move the animals from place to place, and that's actually how -- they call them ungulates -- the big herds of animals have moved across the plains of the earth. i think at this point what we would think of is real success is if it it turns out scientifically that we're right, that the way we're grazing the different animals causes the land to soak up twice as much carbon as normal. >> steyer has always bucked against conventional wisdom. he and his wife chose to settle here on the west coast near their alma mater stanford university, and thousands of miles from wall street. >> i intentionally chose not to live in new york city, which is the center of investment in the united states. i never felt as if i was really part of that community, even though i had lots of friends in it. but you know the old saying, the person who has the most toys when they die wins. that's insane, right? why would that be true?
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and the idea that if you make -- i remember when i first started farallon, i was talking to someone about an investment situation, and there was someone who was trying to take control of the company and i said, that guy is an idiot. and the person i was talking to said, he's worth a lot more money than you are, tom. i don't think he could be so stupid. i started thinking, am i dumber than everybody who is richer than me? and i think no. and i'm not smarter than everybody i'm richer than. >> is that why you left wall street? >> i just didn't think -- i didn't think it would be a great place, and i don't think my wife thought it would be a great place to have little kids. and you know, if you like the outdoors, i mean, we're sitting in pescadero, california, in the outdoors, and it would be hard to re-create. >> steyer tries to get out to his ranch a few times a week. in addition to raising grass-fed cattle, the ranch plays host to
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local school children who come to visit dorothy, the 300-pound pig. >> the normal rule is don't name it if you want to eat it, right? [laughter] but this really is the equivalent of a petting zoo. we could go inside the -- >> the kids come here? >> or go inside and feed them and do that stuff. here comes dorothy. >> there she is. >> let me ask you a question. do you have an apple for her? >> do we have an apple? >> no. if we were smart -- that's what she's interested in, not us. >> look at her walk. >> i know. >> tom steyer seems to have moved comfortably from ceo to his new role as environmental caretaker, but it remains to be seen if his passion and deep pockets are enough to conquer keystone. >> i think my parents had a strong sense of participating in their community, which is all i really think i'm doing. ♪
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